Be very aware of "Ryckman"Studio One has ASC-banned Ryckman as 44% shareholder
Studio One Media Inc (U:SOMD)
Shares Issued 11,362,739
Thursday November 22 2007 - Street Wire
by Mike Caswell
Larry Ryckman, the former owner of the Calgary Stampeders who is banned from stocks in much of Canada, is working for another public company in the United States. According to regulatory filings, he is the chairman of a subsidiary of Studio One Media Inc. of Arizona. He also owns 44 per cent of its shares.
Studio One, which trades on the OTC Bulletin Board, purports to be developing self-contained recording studios. The products, if built, would be installed in public places such as shopping malls. In April, the company closed a reverse takeover with Studio One Entertainment Inc., a private company that lists Mr. Ryckman as its chairman.
Although there is nothing stopping Mr. Ryckman from working with public companies in the U.S., he has a regulatory history in Canada.
Ryckman banned by ASC
In 1996, the Alberta Securities Commission banned Mr. Ryckman for 18 years. It said he manipulated an Alberta Stock Exchange listing called Westgroup Corporation Inc. and ran a wash trading scheme using 32 different brokerage accounts. On 88 separate occasions, he carried out wash trades as part of a "deliberate, pervasive, well-planned and contrived" scheme, the ASC said.
In addition, Mr. Ryckman hired eight "investor relations" representatives to solicit investments in Westgroup, but they were not properly registered. He also hired James Matheson, a broker the ASC had cease traded for 15 years for the 1988 manipulation of Del Rio International, ASC lawyers alleged.
In 1995, the ASC held a hearing, at which it presented three witnesses, five exhibits and 14 volumes of documentation. Mr. Ryckman's lawyer occasionally attended and Mr. Ryckman himself appeared twice.
An expert witness, John Kolosky, testified that Ryckman-controlled accounts executed 70 per cent of the opening trades of Westgroup and 65 per cent of the closing trades in February, 1992, a strong indication of market manipulation.
In January, 1996, the regulator found Mr. Ryckman guilty. "The manipulation scheme ... was a blatant attempt at creating a false and misleading perception of market activity," a three-member panel ruled. "Schemes of this nature and magnitude can only have the result of damaging investor confidence in the market and bringing the market into disrepute."
In an interview, Mr. Ryckman said he never had a chance to properly defend himself. When pressed for details, he only said, "There's no win on this ... it goes back 11 years."
In its decision, the panel ordered Mr. Ryckman to pay $492,000 in investigative costs and barred him from trading all securities and from serving as a director or officer for 18 years. His disregard for the authority of the ASC was an aggravating factor.
Mr. Ryckman never paid the penalty, and he does not plan to. "It was a difficult situation ... I don't agree with it," he said.
In reciprocal actions, the B.C. and Ontario securities commissions also banned Mr. Ryckman.
Ryckman appears on the OTC-BB
Today, Mr. Ryckman lives in Scottsdale, Ariz., where he resides in a 4,000-square-foot, $1.5-million house. According to regulatory filings, he is active in the stock market again.
In June, 2006, Studio One Media reported that Mr. Ryckman acquired 185,000 of its shares on undisclosed terms. He held the shares through his private company, Sundance Financial Corp., which is incorporated in the Turks and Caicos Islands.
Then, this October, Studio One disclosed that Mr. Ryckman indirectly owned 5.1 million shares, or 44 per cent of the 11.6 million it had outstanding. He acquired most of those shares as the public company completed a reverse takeover of his private company, Studio One Entertainment Inc.
Studio One, which has a 52-week high of $6.95, last traded at $4.65. In news releases, the company says it plans to launch its MyStudio recording studios in shopping malls across the country in the coming months.
In its filings, the company makes no mention of Mr. Ryckman's Alberta ban, and Mr. Ryckman told Stockwatch he does not have to disclose it. "I don't believe that the ASC matter was proper, so I have no intention of disclosing it," he said. He said he has consulted with his lawyer on the matter.
Before Studio One, Mr. Ryckman was already active on the OTC-BB. In 2004, he was a shareholder of Tankless Systems Worldwide Inc., a company that made water heaters. Tankless's annual report that year disclosed that Mr. Ryckman held 1.1 million shares through his private holding company, Sundance Financial Corp., which is registered in the Turks and Caicos Islands.
The company went to a high of $1.55 in 2005, as it touted technology that could save consumers $25-billion in wasted energy costs. Unfortunately for shareholders, the stock has since fallen, and last traded at 11 cents. The company is now known as Skye International Inc., and it no longer lists Mr. Ryckman as a shareholder.
Ryckman's Canadian promotions
In Canada, Mr. Ryckman's career as a promoter goes back to the 1980s. According to Stockwatch records, he has served as a director of at least eight public companies.
Among them is Aabbax International Financial Corp., a company that claimed to have found a method for extracting crude oil from under Alberta's tar sands. In 1993, it reached a high of $1.73 as it reported a deal to drill a deep well in Northern Alberta.
When Aabbax finally drilled the "historic" well in November, 1994, it produced at a pressure of about 5,500 kilopascals. Unfortunately for investors, the product was salt water.
The stock fell to 22 cents before the exchange halted it, "pending clarification of the company's affairs including share issuances."
Little else was said about Aabbax until 2003, when the RCMP charged Mr. Ryckman with two counts of fraud related to his dealings at the company. Prosecutors said he issued 600,000 shares to two employees for no consideration. Mr. Ryckman settled the case out of court by pleading guilty to a non-criminal violation of the Alberta Securities Act and agreeing to pay a $75,000 fine.
Another company that Mr. Ryckman ran was Archer Communications Inc., which went to a $26.25 high in 1990 on expectations that its QSound recording technology would transform the record industry. When Mr. Ryckman resigned in January, 1992, it traded at $2.40.
Ryckman buys the Stampeders
In October, 1991, Mr. Ryckman made headlines in Alberta when he bought the cash-strapped Calgary Stampeders football club. He privatized the community-owned team and signed marquee quarterback Doug Flutie to a $4-million, three-year deal.
The signing came after a drawn out contract dispute between Mr. Flutie and the B.C. Lions, a team then owned by Murray Pezim. (Mr. Pezim's company, Prime Equities International Corp., would later be a proposed partner in Aabbax's Alberta well, but it opted out.)
The Stampeders won the Grey Cup in Mr. Ryckman's first year as owner.
From there, things went downhill for the promoter. In 1996, the Alberta Treasury Branch petitioned his personal holding company, Ryckman Financial Corp., into receivership after it defaulted on $8.6-million in loans. The receivership came on the heels of the ASC action. Later that year, he sold the Stampeders to Calgary restaurateur Sig Gutsche.
Around 2000, Mr. Ryckman left for Arizona, and said he wanted out of the media spotlight. "I just don't give interviews anymore," he told Stockwatch. "I have no interest of going back into the limelight."
With his return to the stock market, it may only be a matter of time before that spotlight catches up with him again.
© 2007 Canjex Publishing Ltd.